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Lecture 10 Outline

Lecture 10 Outline - III R OLE OF I DEAS IN DETERMINING M...

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Economics 134 Professor Christina Romer Spring 2012 Professor David Romer LECTURE 10 THE CONDUCT OF POSTWAR MONETARY POLICY FEBRUARY 16, 2012 I. O VERVIEW A. Where we have been B. Where we are headed II. D ESCRIBING P OLICY C HOICES WITH A M ONETARY P OLICY R ULE A. Overview B. Taylor’s specification of a monetary policy rule C. Monetary policy rules in a variety of regimes D. Parameter estimates 1. Taylor’s preferred coefficients 2. Importance of real rates rising in response to inflation E. Parameter estimates from different sample periods F. Deducing policy mistakes using deviations from a Taylor Rule
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Unformatted text preview: III. R OLE OF I DEAS IN DETERMINING M ONETARY P OLICY A CTIONS AND O UTCOMES A. Overview B. Early Martin Era Key idea: Intuitive natural rate hypothesis C. Late Martin and Early Burns Key idea: Exploitable inflation-output tradeoff Key idea: Unrealistically low estimate of the natural rate D. Middle Burns and Miller Key idea: Slack doesn’t matter E. Late Burns, Volcker, and Greenspan Key ideas: Slack matters and the natural rate is fairly high G. Bernanke and the current FOMC Key idea: Loss of credibility could be harmful...
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